Better Capital, a listed private equity turnaround specialist founded by former Alchemy Partners managing partner Jon Moulton, is raising capital for a fund that will focus mainly on UK and Irish turnaround opportunities.
The company has raised £158 million under firm placing for the Better Capital II Fund and expects to raise up to £200 million to be raised by firm placing, placing and open offer of 2012.
Better Capital’s directors believe that current economic conditions should lead to a further attractive period for turnaround investment opportunities as companies continue to suffer from lack of capital and operational expertise.
The firm has a “significant pipeline” of investments and believes the new fund could be substantially invested or committed within 24 months.
The firm’s Better Capital Fund I raised £203.8 million and was 94% committed in a portfolio of eight companies as of September 30, 2011.
Said Richard Crowder, Better Capital Limited chairman, in a statement: “We have received strong support from investors for our new shares to invest in a new vintage of turnaround opportunities. The effects of the recession experienced by the UK and Irish economies have continued and resulted in businesses suffering from poor trading conditions and restricted corporate credit. These conditions created a wide range of opportunities for Better Capital Fund I, which is now almost fully committed. Better Capital Fund II will target selective investment opportunities from Better Capital’s strong deal flow where the general partner and the consultant see the potential for value generation through the provision of capital, often together with operational expertise to enhance business performance.”
Jon Moulton, Better Capital LLP chairman, added, “Better Capital Fund I has rapidly developed a portfolio of high quality turnaround opportunities which is generating positive growth trends since Better Capital’s investment and operational input. With cash readily available, we have been able to assess and act quickly to save companies, invest in turnaround efficiencies and return companies to profitability. We expect banks to increasingly pull back from their support of distressed companies, as tough economic conditions persist and regulation forces banks to divest of equity. These factors should only increase the opportunities for Better Capital Fund II.”